This morning I linked to a Bloomberg story that suggested Village Voice Media, which owns New York's Village Voice and the Seattle Weekly as part of its sizable alt-weekly empire, could be put "into involuntary bankruptcy" by the San Francisco Bay Guardian, which has been trying unsuccessfully to collect on the $21 million it's owed by VVM's San Francisco paper, SF Weekly, as part of a predatory pricing judgment against SF Weekly.
Now Business Insider reports that VVM is saying Bloomberg got the story wrong.
Village Voice chairman and chief executive officer Jim Larkin tells us that the Bloomberg report needs corrections.
"The Bloomberg story is totally inaccurate regarding Village Voice, which is not a party to this judgment," he wrote us in an email. "Village Voice Media Holdings, LLC will be filing a demand for correction this afternoon with Bloomberg."
I think I know what's going on here, because I wrote about it at length yesterday.
What Village Voice Media Holdings LLC is likely to tell Bloomberg is this:
The $21 million predatory pricing judgment is technically against the company that owns SF Weekly, SF Weekly LP, and also against the holding company that controls SF Weekly LP—that's New Times Media LLC.
Now, according to lawyers involved in the case, VVM's complicated corporate structure puts this holding company, New Times Media LLC, downstream of entities such as Village Voice Media Holdings LLC and Village Voice Media LLC.
Stay with me here.
Light at the end of the LLC tunnel coming shortly.
Randall S. Farrimond, the lawyer for VVM, argues that any liability VVM faces should stop at the entities SF Weekly LP and New Times Media LLC, since the court judgment is only, technically, against them.
The problem is that New Times Media LLC, according to a court declaration by its chief financial officer, also "owns the membership interests" in 15 other "operating entities" around the country—including the Village Voice and, to take our local example, the Seattle Weekly.
As I wrote yesterday, this means a few things, one of which is that:
A person who works for one of [VVM's] alt-weeklies actually works for an LP (or an LLC) that's controlled by another LLC, that's controlled by still another LLC, and perhaps ultimately controlled by yet another LLC (or more) on top of that.
It also means that the Bay Guardian, which currently has a $21 million lien against the assets of New Times Media LLC, can try to—as the Bloomberg report suggests—force into bankruptcy all or some of those "operating entities" that New Times Media LLC controls.
The position of VVM is that those other "operating entities" are "not a party to this judgment."
The position of the Bay Guardian is that they are.
Courts in California and Delaware (where most of VVM's "operating entities" are registered) are now in the process of sorting out who's right.
But Bloomberg, while it may have had VVM's complicated mix of LLCs and LPs a little confused in its initial report, is not incorrect in stating that VVM's alt-weeklies, including the Village Voice, could be forced into involuntary bankruptcy if the Bay Guardian has its way.